RightMove's House Price Index

jonclarke · 20 February 2006 at 5:22PM

Hi all,

First post here. As many of you will have seen, RightMove has just released its report for February, and has highlighted another increase in house prices. Given that RightMove is intending to float on the stock market, you would expect an upbeat message from them on the state of the property market and this is indeed the thrust of their latest report.

Being a little suspicious about these kinds of house price reports, last November I started an automated analysis of the asking prices of all the properties in a 20 mile radius of my postcode, the data coming from the RightMove website. This now amounts to some 43,000 properties whose asking prices I have tracked, so I have a pretty good sample to play with.

Well, something just doesn't add up. The mean average (even without removing very expensive properties to skew the results) asking price of these properties has fallen £3,500 from the middle of November to now - this seems to be at odds with RightMove's report showing an increase over a similar period. The median asking price has also fallen £1,000. And there have been over 7,500 reductions in asking prices for those properties within my 20 mile radius (see https://www.nwhouseprices.co.uk).

I've previously emailed RightMove about its HPI calculation methodology. What most people don't appreciate is that their statistics are only made up from the properties added to their website within the last month, and that only the initial asking price is used. If a property on their site has its asking price reduced, this reduction is not included within their calculations. Am I the only person who thinks this is, at the very least, misleading?

Jon

mystic_trev · 20 February 2006 at 5:49PM

I smelt a rat with their figs too - just dosen't add up? I'm sure prices are still rising but not by 2.7% in a month, and yes I know their figs are based on asking prices. I've got a dreadfull feeling the "big slumps" going to start latter this year, as all the factors for a crash now seem to be in place, or soon will be.I bet Interest rates will start going up later in the year, so if anybodies thinking they'll go down, think again. All IMVHO

Do you post on HPC?

Jay1b · 20 February 2006 at 5:53PM

JonClarke have you thought about it maybe different in your area to nationally?

Some parts houses prices are dropping, but others they are rising expotentially. In my area they are kind of stagant.

jonclarke · 20 February 2006 at 5:59PM

Jay1b wrote:

JonClarke have you thought about it maybe different in your area to nationally?

Some parts houses prices are dropping, but others they are rising expotentially. In my area they are kind of stagant.

Sure, I would expect regional variations, thats quite true.

The main thing that concerns me is that, nationwide, they don't take ANY asking price reductions into account when they publish their HPI figures.

Edit : And there a LOT of asking price reductions (at least in my area).

jonclarke · 20 February 2006 at 6:02PM

mystic_trev wrote:

I smelt a rat with their figs too - just dosen't add up? I'm sure prices are still rising but not by 2.7% in a month, and yes I know their figs are based on asking prices. I've got a dreadfull feeling the "big slumps" going to start latter this year, as all the factors for a crash now seem to be in place, or soon will be.I bet Interest rates will start going up later in the year, so if anybodies thinking they'll go down, think again. All IMVHO

Do you post on HPC?

I have posted similar data on HPC (not that I'm necessarily a property bear, I have no great inclinations either way), but I'd publish this kind of information anywhere whereever there is an interested audience.

meanmachine_2 · 20 February 2006 at 10:21PM

Don't rightmove ALWAYS report a 2.5% rise in February, no matter what's happening in the actual market?

They'll be reporting a rise in Feb 2007/8/9/10, even if there's a gigantic crash happening in the real world.

And of course they were going to hit 200K just before their IPO.

Not that the general public will realise. Spin, spin, spin.

If you think politcians are bad...

In my area (N Essex), there's a huge glut of property, most of which doesn't seem to be shifting. And that's on rightmove.

Hmmm. Something doesn't add up.

mystic_trev · 20 February 2006 at 10:26PM

Here's a nice little house on Rightmove.......lovely gardens!

http://www.rightmove.co.uk/viewdetails-5395540.rsp?pa_n=11&tr_t=buy

nmiah786 · 20 February 2006 at 10:32PM

mystic_trev wrote:

Here's a nice little house on Rightmove.......lovely gardens!

http://www.rightmove.co.uk/viewdetails-5395540.rsp?pa_n=11&tr_t=buy

THE VENDOR IS ACTUALLY PAYING THESE EA.....WOW!

Doozergirl · 20 February 2006 at 10:41PM

mystic_trev wrote:

Here's a nice little house on Rightmove.......lovely gardens!

http://www.rightmove.co.uk/viewdetails-5395540.rsp?pa_n=11&tr_t=buy

:rotfl:

"Being a particular feature of the property, the garden is predominately laid to lawn with raised beds extensively planted with a wide variety of colourful stock. The near end of the garden has been laid out in the form of a patio with decorative crushed glass covering"

So funny! Where are the interior pictures?! Is the price reasonable, considering? (serious question!)

SammyD_2 · 20 February 2006 at 10:46PM

mystic_trev wrote:

Here's a nice little house on Rightmove.......lovely gardens!

http://www.rightmove.co.uk/viewdetails-5395540.rsp?pa_n=11&tr_t=buy

Yikes...not sure what they are being paid for with those photos!

On house prices though, certainly in our area they are definately up substantially on this time last year. We have been watching the actual sale prices in the 10 roads in our "bit" of the suburbs, last year nothing was for sale and anything that was went for around the £250k mark. Now sales are happening really quickly (two in our street have been sold three weeks after going on the market - both houses we know really well as we have been inside, and one was on the market when we bought ours but we missed out on it). Sales are now happening at £285-290K in our area - and these are not asking prices, they are what is recorded by the land registry info.

I think by London standards we are still an affordable area of good quality houses, in a very safe traditional family suburb. What I am noticing is that the people who used to be on our street were tradesmen, taxi drivers etc etc. Now it is doctors, solicitors and university professors.

exil · 20 February 2006 at 10:59PM

Look at the land registry figures, these are based on the ACTUAL prices, not asking prices.

Have shown a slight fall last quarter.

Recently:

Q4 2004 - slight fall
Q1 2005 - slight fall
Q2 2005 - small rise
Q3 2005 - biggish rise
Q4 2005 - slight fall.

Prices up about 3-4% over a year.

RightMove's House Price Index

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